Ferrous scrap prices in Taiwan were adjusted downwards during August, resulting in a 4% month-over-month decrease. September has continued the downtrend, with prices lower by around 10% at the time of writing. This equates to a reduction in ferrous scrap prices to Taiwan of approximately 30% from the same period last year.
As with most other markets around the world, steel consumption in Taiwan has softened with steel prices declining weekly. The decision by a few Taiwanese mills to replace some steel scrap purchases with over-supplied, low-priced billets has put additional pressure on steel scrap prices. However, some market participants expect lower ferrous scrap prices to yield lower supply volumes and eventually restore market balance.
Overall, the Taiwanese economy is currently experiencing a slight contraction directly affected by the US/China trade dispute, evidenced by manufacturing declining in August owing to export orders falling swiftly. However, the Taiwanese central bank recently changed its 2019 forecast from 2% GDP growth to 2.4% as it projects new opportunities for global companies to shift from Chinese to Taiwanese manufacturing in order to avoid tariffs. This change will encourage more exports out of the country in the months to follow.
Sims Metal Management Global Trade Corporation (USA), General Delegate & Board Member of the BIR Ferrous Division